SB1655 - 562R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 36-405, Arizona Revised Statutes, is amended to read:

START_STATUTE36-405. Powers and duties of the director

A. The director shall adopt rules to establish minimum standards and requirements for constructing, modifying and licensing health care institutions necessary to ensure the public health, safety and welfare. The standards and requirements shall relate to the construction, equipment, sanitation, staffing for medical, nursing and personal care services, and recordkeeping pertaining to administering medical, nursing, behavioral health and personal care services, in accordance with generally accepted practices of health care. The standards shall require that a physician who is licensed pursuant to title 32, chapter 13 or 17 medically discharge patients from surgery and shall allow an outpatient surgical center to require that either an anesthesia provider who is licensed pursuant to title 32, chapter 13, 15 or 17 or a physician who is licensed pursuant to title 32, chapter 13 or 17 remain present on the premises until all patients are discharged from the recovery room. Except as otherwise provided in this subsection, the director shall use the current standards adopted by the joint commission on accreditation of hospitals and the commission on accreditation of the American osteopathic association or those adopted by any recognized accreditation organization approved by the department as guidelines in prescribing minimum standards and requirements under this section.

B. The director, by rule, may:

1. Classify and subclassify health care institutions according to character, size, range of services provided, medical or dental specialty offered, duration of care and standard of patient care required for the purposes of licensure. Classes of health care institutions may include hospitals, infirmaries, outpatient treatment centers, health screening services centers and residential care facilities. Whenever the director reasonably deems distinctions in rules and standards to be appropriate among different classes or subclasses of health care institutions, the director may make such distinctions.

2. Prescribe standards for determining a health care institution's substantial compliance with licensure requirements.

3. Prescribe the criteria for the licensure inspection process.

4. Prescribe standards for selecting health care-related demonstration projects.

5. Establish nonrefundable application and licensing fees for health care institutions, including a grace period and a fee for the late payment of licensing fees.

6. Establish a process for the department to notify a licensee of the licensee's licensing fee due date.

7. Establish a process for a licensee to request a different licensing fee due date, including any limits on the number of requests by the licensee.

7. Establish an additional monitoring fee for health care institutions that are not in compliance with the requirements of this chapter and the rules adopted pursuant to this chapter.

C. The director, by rule, shall adopt licensing provisions that facilitate the colocation and integration of outpatient treatment centers that provide medical, nursing and health-related services with behavioral health services consistent with article 3.1 of this chapter.

D. Ninety percent of the fees collected pursuant to this section shall be deposited, pursuant to sections 35-146 and 35-147, in the health services licensing fund established by section 36-414 and ten percent of the fees collected pursuant to this section shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

E. Subsection B, paragraph 5 of this section does not apply to a health care institution operated by a state agency pursuant to state or federal law or to adult foster care residential settings. END_STATUTE

Sec. 2. Section 36-413, Arizona Revised Statutes, is amended to read:

START_STATUTE36-413. Nutrition and feeding assistants; training programs; regulation; civil penalty; definition

A. The department may adopt rules to prescribe minimum standards for training programs for nutrition and feeding assistants in licensed skilled nursing facilities, including instructor qualifications, and may grant, deny, suspend and revoke approval of any training program that violates these standards. These standards must include:

1. Screening requirements.

2. Initial qualifications.

3. Continuing education requirements.

4. Testing requirements to assure ensure competency.

5. Supervision requirements.

6. Requirements for additional training based on patient needs.

7. Maintenance of records.

8. Special feeding requirements based on level of care.

B. Pursuant to section 36-431.01, the department may shall impose a civil penalty on a training program that violates standards adopted by the department.

C. If the department adopts standards for training programs pursuant to subsection A of this section, the department, as part of its routine inspection of a health care facility that provides a training program, shall determine the facility's compliance with these standards.

D. For the purposes of this section, "nutrition and feeding assistant" has the same meaning as paid feeding assistant as defined in 42 Code of Federal Regulations part 483 and section 488.301.END_STATUTE

Sec. 3. Section 36-414, Arizona Revised Statutes, is amended to read:

START_STATUTE36-414. Health services licensing fund; exemption

A. The health services licensing fund is established consisting of monies deposited pursuant to sections 30-654, 32-1308, 32-2805, 36-405, 36-431.01, 36-765.05, 36-766.06, 36-851.01, 36-882, 36-897.01, and 36-1903 and 36-2063. The department of health services shall administer the fund.

B. Monies in the fund are subject to legislative appropriation.

C. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. END_STATUTE

Sec. 4. Section 36-422, Arizona Revised Statutes, is amended to read:

START_STATUTE36-422. Application for license; notification of proposed change in status; joint licenses; definitions

A. A person who wishes to apply for a license to operate a health care institution pursuant to this chapter shall submit to the department all of the following:

1. An application on a written or electronic form that is prescribed, prepared and furnished by the department and that contains all of the following:

(a) The name and location of the health care institution.

(b) Whether the health care institution is to be operated as a proprietary or nonproprietary institution.

(c) The name of the governing authority. The applicant shall be the governing authority having the operative ownership of, or the governmental agency charged with the administration of, the health care institution sought to be licensed. If the applicant is a partnership that is not a limited partnership, the partners shall apply jointly, and the partners are jointly the governing authority for purposes of this article.

(d) The name and business or residential address of each controlling person and an affirmation that none of the controlling persons has been denied a license or certificate by a health profession regulatory board pursuant to title 32 or by a state agency pursuant to chapter 6, article 7 or chapter 17 of this title or a license to operate a health care institution in this state or another state or has had a license or certificate issued by a health profession regulatory board pursuant to title 32 or issued by a state agency pursuant to chapter 6, article 7 or chapter 17 of this title or a license to operate a health care institution revoked. If a controlling person has been denied a license or certificate by a health profession regulatory board pursuant to title 32 or by a state agency pursuant to chapter 6, article 7 or chapter 17 of this title or a license to operate a health care institution in this state or another state or has had a health care professional license or a license to operate a health care institution revoked, the controlling person shall include in the application a comprehensive description of the circumstances for the denial or the revocation.

(e) The class or subclass of health care institution to be established or operated.

(f) The types and extent of the health care services to be provided, including emergency services, community health services and services to indigent patients.

(g) The name and qualifications of the chief administrative officer implementing direction in that specific health care institution.

(h) Other pertinent information required by the department for the proper administration of this chapter and department rules.

2. The attestation required by section 36-421, subsection A.

3. The applicable application fee.

B. An application submitted pursuant to this section shall contain the written or electronic signature of:

1. If the applicant is an individual, the owner of the health care institution.

2. If the applicant is a partnership, limited liability company or corporation, two of the officers of the corporation or managing members of the partnership or limited liability company or the sole member of the limited liability company if it has only one member.

3. If the applicant is a governmental unit, the head of the governmental unit.

C. An application for licensure shall be submitted at least sixty but not more than one hundred twenty days before the anticipated date of operation. An application for a substantial compliance survey submitted pursuant to section 36-425, subsection G shall be submitted at least thirty days before the date on which the substantial compliance survey is requested.

D. If a current licensee intends to terminate the operation of a licensed health care institution or if a change of ownership is planned, the current licensee shall notify the director in writing at least thirty days before the termination of operation or change in ownership is to take place. The current licensee is responsible for preventing any interruption of services required to sustain the life, health and safety of the patients or residents. A new owner shall not begin operating the health care institution until the director issues a license to the new owner.

E. A licensed health care institution for which operations have not been terminated for more than thirty days may be relicensed pursuant to the codes and standards for architectural plans and specifications that were applicable under its most recent license.

F. If a person operates a hospital in a county with a population of more than five hundred thousand persons in a setting that includes satellite facilities of the hospital that are located separately from the main hospital building, the department at the request of the applicant or licensee shall issue a single group license to the hospital and its designated satellite facilities located within one-half mile of the main hospital building if all of the facilities meet or exceed department licensure requirements for the designated facilities. At the request of the applicant or licensee, the department shall also issue a single group license that includes the hospital and its designated satellite facilities that are located farther than one-half mile from the main hospital building if all of these facilities meet or exceed applicable department licensure requirements. Each facility included under a single group license is subject to the department's licensure requirements that are applicable to that category of facility. Subject to compliance with applicable licensure or accreditation requirements, the department shall reissue individual licenses for the facility of a hospital located in separate buildings from the main hospital building when requested by the hospital. This subsection does not apply to nursing care institutions and residential care institutions. The department is not limited in conducting inspections of an accredited health care institution to ensure that the institution meets department licensure requirements. If a person operates a hospital in a county with a population of five hundred thousand persons or less in a setting that includes satellite facilities of the hospital that are located separately from the main hospital building, the department at the request of the applicant or licensee shall issue a single group license to the hospital and its designated satellite facilities located within thirty-five miles of the main hospital building if all of the facilities meet or exceed department licensure requirements for the designated facilities. At the request of the applicant or licensee, the department shall also issue a single group license that includes the hospital and its designated satellite facilities that are located farther than thirty-five miles from the main hospital building if all of these facilities meet or exceed applicable department licensure requirements.

G. If a county with a population of more than one million persons or a special health care district in a county with a population of more than one million persons operates an accredited hospital that includes the hospital's accredited facilities that are located separately from the main hospital building and the accrediting body's standards as applied to all facilities meet or exceed the department's licensure requirements, the department shall issue a single license to the hospital and its facilities if requested to do so by the hospital. If a hospital complies with applicable licensure or accreditation requirements, the department shall reissue individual licenses for each hospital facility that is located in a separate building from the main hospital building if requested to do so by the hospital. This subsection does not limit the department's duty to inspect a health care institution to determine its compliance with department licensure standards. This subsection does not apply to nursing care institutions and residential care institutions.

H. An applicant or licensee must notify the department within thirty days after any change regarding a controlling person and provide the information and affirmation required pursuant to subsection A, paragraph 1, subdivision (d) of this section.

I. A behavioral health residential facility that provides services to children must notify the department within thirty days after the facility begins contracting exclusively with the federal government, receives only federal monies and does not contract with this state.

J. This section does not limit the application of federal laws and regulations to an applicant or licensee that is certified as a medicare or an Arizona health care cost containment system provider under federal law.

K. Except for an outpatient treatment center that provides dialysis services or abortion procedures or that is exempt from licensure pursuant to section 36-402, subsection A, paragraph 12, a person wishing to begin operating an outpatient treatment center before a licensing inspection is completed shall submit all of the following:

1. The license application required pursuant to this section.

2. All applicable application and license fees.

3. A written request for a temporary license that includes:

(a) The anticipated date of operation.

(b) An attestation signed by the applicant that the applicant and the facility comply with and will continue to comply with the applicable licensing statutes and rules.

L. Within seven days after the department's receipt of the items required in subsection K of this section, but not before the anticipated operation date submitted pursuant to subsection C of this section, the department shall issue a temporary license that includes:

1. The name of the facility.

2. The name of the licensee.

3. The facility's class or subclass.

4. The temporary license's effective date.

5. The location of the licensed premises.

M. A facility may begin operating on the effective date of the temporary license.

N. The director may cease the issuance of temporary licenses at any time if the director believes that public health and safety is endangered.

O. An outpatient treatment center that is exempt from licensure pursuant to section 36-402, subsection A, paragraph 12 is subject to reasonable inspection by the department if the director has reasonable cause to believe that patient harm is or may be occurring at that outpatient treatment center. A substantiated complaint that harm is occurring at an exempt outpatient treatment center is a violation of this chapter against the license of the hospital listed in the notice required by section 36-402, subsection A, paragraph 12.

P. Each hospital that is licensed pursuant to this chapter shall provide to and maintain with the department a current list of exempt outpatient treatment centers that have the same direct owner or indirect owner as the hospital.

Q. For the purposes of this section:

1. "Accredited" means accredited by a nationally recognized accreditation organization.

2. "Satellite facility" means an outpatient facility at which the hospital provides outpatient medical services.END_STATUTE

Sec. 5. Section 36-422.01, Arizona Revised Statutes, is amended to read:

START_STATUTE36-422.01. Health care institutions; termination of operation; medical records; civil penalties; definition

A. In addition to the requirements prescribed in section 36-422, subsection D, if a current licensee intends to terminate the operation of a licensed health care institution, the current licensee shall do one of the following before the health care institution ceases operation:

1. Provide each patient of the health care institution with the patient's medical records.

2. Transfer the health care institution's medical records to a third-party entity to ensure patient access to the medical records.

B. If a patient or a patient's health care decision maker requests access to or copies of the patient's medical records, the health care institution or third-party entity in possession of the medical records shall provide access to or copies of the medical records to the patient or the patient's health care decision maker in accordance with title 12, chapter 13, article 7.1.

C. A licensee that fails to comply with subsection A of this section is subject to a civil penalty of not more than $10,000. The director may use a licensee's failure to comply with subsection A of this section as grounds to deny a subsequent license pursuant to section 36-425, subsection K L.

D. For the purposes of this section, "medical record" has the same meaning prescribed in section 36-2201. END_STATUTE

Sec. 6. Section 36-424, Arizona Revised Statutes, is amended to read:

START_STATUTE36-424. Inspections; suspension or revocation of license; report to board of examiners of nursing care institution administrators and assisted living facility managers

A. Except as provided in subsection B of this section, the director shall inspect the premises of the health care institution and investigate the character and other qualifications of the applicant to ascertain whether the applicant and the health care institution are in substantial compliance with the requirements of this chapter and the rules established pursuant to this chapter. The director may prescribe rules regarding department background investigations into an applicant's character and qualifications.

B. The director may accept proof that a health care institution is an accredited hospital or is an accredited health care institution in lieu of all compliance inspections required by this chapter if the director receives a copy of the health care institution's accreditation report for the licensure period and the health care institution is accredited by an independent, nonprofit accrediting organization approved by the secretary of the United States department of health and human services. If the health care institution's accreditation report is not valid for the entire licensure period, the department may conduct a compliance inspection of the health care institution during the time period the department does not have a valid accreditation report for the health care institution. For the purposes of this subsection, each licensed premises of a health care institution must have its own accreditation report. The director may not accept an accreditation report in lieu of a compliance inspection of:

1. An intermediate care facility for individuals with intellectual disabilities.

2. A nursing-supported group home.

3. A health care institution if the health care institution has been subject to an enforcement action pursuant to section 36-427 or 36-431.01 or to a criminal penalty pursuant to title 13 within the year preceding the annual licensing fee anniversary date five years.

4. A residential care institution.

C. On a determination by the director that there is reasonable cause to believe a health care institution is not adhering to the licensing requirements of this chapter, the director and any duly designated employee or agent of the director, including county health representatives and county or municipal fire inspectors, consistent with standard medical practices, may enter on and into the premises of any health care institution that is licensed or required to be licensed pursuant to this chapter at any reasonable time for the purpose of determining the state of compliance with this chapter, the rules adopted pursuant to this chapter and local fire ordinances or rules. Any application for licensure under this chapter constitutes permission for and complete acquiescence in any entry or inspection of the premises during the pendency of the application and, if licensed, during the term of the license. If an inspection reveals that the health care institution is not adhering to the licensing requirements established pursuant to this chapter, the director may take action authorized by this chapter. Any health care institution, including an accredited hospital, whose license has been suspended or revoked in accordance with this section is subject to inspection on application for relicensure or reinstatement of license.

D. The director shall immediately report to the board of examiners of nursing care institution administrators and assisted living facility managers information identifying that a nursing care institution administrator's conduct may be grounds for disciplinary action pursuant to section 36-446.07. END_STATUTE

Sec. 7. Section 36-425, Arizona Revised Statutes, is amended to read:

START_STATUTE36-425. Inspections; issuance of license; posting requirements; provisional license; violation; classification; civil penalty; denial of license

A. On receipt of a properly completed application for a health care institution license, the director shall conduct an inspection of the health care institution as prescribed by this chapter. If an application for a license is submitted due to a planned change of ownership, the director shall determine the need for an inspection of the health care institution. Based on the results of the inspection and after the submission of the applicable licensing fee, the director shall either deny the license or issue a regular or provisional license. A license issued by the department shall be posted in a conspicuous location in the reception area of that health care institution.

B. The director shall issue a license if the director determines that an applicant and the health care institution for which the license is sought substantially comply complies with the requirements of this chapter and rules adopted pursuant to this chapter and the applicant agrees to carry out a plan acceptable to the director to eliminate any deficiencies. The director shall not require a health care institution that was designated as a critical access hospital to make any modifications required by this chapter or rules adopted pursuant to this chapter in order to obtain an amended license with the same licensed capacity the health care institution had before it was designated as a critical access hospital if all of the following are true:

1. The health care institution has subsequently terminated its critical access hospital designation.

2. The licensed capacity of the health care institution does not exceed its licensed capacity before its designation as a critical access hospital.

3. The health care institution remains in compliance with the applicable codes and standards that were in effect at the time the facility was originally licensed with the higher licensed capacity.

C. A health care institution license does not expire and remains valid unless:

1. The department subsequently revokes or suspends the license.

2. The license is considered void because the licensee did not pay the licensing fee, any civil penalties or the provider agreement fees assessed before the licensing fee due date.

D. Except as provided in section 36-424, subsection B and subsection E of this section, the department shall conduct a compliance inspection of a health care institution to determine compliance with this chapter and rules adopted pursuant to this chapter at least once annually.

E. If the department determines a facility to be deficiency free on a compliance survey, the department shall not conduct a compliance survey of that facility for twenty-four months after the date of the deficiency free survey. This subsection does not:

1. Prohibit the department from enforcing licensing requirements as authorized by section 36-424.

2. Apply to residential care institutions.

F. A hospital licensed as a rural general hospital may provide intensive care services.

G. The director shall issue a provisional license for a period of not more than one year if an inspection or investigation of a currently licensed health care institution or a health care institution for which an applicant is seeking a license reveals that the health care institution is not in substantial compliance with department licensure requirements and the director believes that the immediate interests of the patients and the general public are best served if the health care institution is given an opportunity to correct deficiencies. The applicant or licensee shall agree to carry out a corrective action plan to eliminate deficiencies that is acceptable to the director. The director shall not issue consecutive provisional licenses to a single health care institution. The director shall not issue a license to the current licensee or a successor applicant before the expiration of the provisional license unless the health care institution submits an application for a substantial compliance survey and is found to be in substantial compliance. The director may issue a license only if the director determines that the health care institution is in substantial compliance with the licensure requirements of the department and this chapter. This subsection does not prevent the director from taking action to protect the safety of patients pursuant to section 36-427.

H. A residential care institution that operates in this state without a license in violation of this chapter is guilty of a class 6 felony and the director shall assess a civil penalty of at least $5,000 and not more than $10,000 for each violation. Each day the residential care institution operates without a license is a separate violation.

H. I. Subject to the confidentiality requirements of articles 4 and 5 of this chapter, title 12, chapter 13, article 7.1 and section 12-2235, the licensee shall keep current department inspection reports at the health care institution. Unless federal law requires otherwise, the licensee shall post in a conspicuous location a notice that identifies the location at that health care institution where the inspection reports are available for review.

I. J. A health care institution shall immediately notify the department in writing when there is a change of the chief administrative officer specified in section 36-422, subsection A, paragraph 1, subdivision (g).

J. K. When the department issues an original license or an original provisional license to a health care institution, it shall notify the owners and lessees of any agricultural land within one-fourth mile of the health care institution. The health care institution shall provide the department with the names and addresses of owners or lessees of agricultural land within one-fourth mile of the proposed health care institution.

K. L. In addition to the grounds for denial of licensure prescribed pursuant to subsection A of this section, the director may shall deny a license because an applicant or anyone in a business relationship with the applicant, including stockholders and controlling persons, has had a license to operate a health care institution denied, revoked or suspended or a license or certificate issued by a health profession regulatory board pursuant to title 32 or issued by a state agency pursuant to chapter 6, article 7 or chapter 17 of this title denied, revoked or suspended or has a licensing history of recent serious violations occurring in this state or in another state that posed a direct risk to the life, health or safety of patients or residents.

L. M. In addition to the requirements of this chapter, the director may prescribe by rule other licensure requirements. END_STATUTE

Sec. 8. Title 36, chapter 4, article 2, Arizona Revised Statutes, is amended by adding sections 36-425.10 and 36-425.11, to read:

START_STATUTE36-425.10. Behavioral health residential facilities; admittance; notification of family; conditions for transportation

A. When a resident is admitted for initial evaluation, a behavioral health residential facility shall notify the resident's family or next of kin within seventy-two hours after the initial evaluation. The notification shall be documented in the resident's medical record.

B. A behavioral health residential facility may not coordinate, facilitate, arrange for or solicit transportation of a person to the behavioral health residential facility if the person is intoxicated or under the influence of alcohol or other substances, unless the person is referred by an approved provider of a tribal health care program or a regional behavioral health authority or is court-ordered. END_STATUTE

START_STATUTE36-425.11. Behavioral health residential facilities; resident discharge; transportation; documentation

A behavioral health residential facility shall inquire, both verbally and in writing, whether a resident wants to be transported to the resident's place of residence or an alternative safe living space in this state as requested by the resident after discharge from the behavioral health residential facility. The resident's wishes regarding transportation shall be documented on a form prescribed by the department, signed by the resident and retained in the resident's medical record. The behavioral health residential facility shall ensure safe and reliable transportation, as determined by the department, for a resident who wishes to be transported to the resident's place of residence or an alternative safe living space in this state as requested by the resident on discharge. END_STATUTE

Sec. 9. Section 36-431.01, Arizona Revised Statutes, is amended to read:

START_STATUTE36-431.01. Violations; civil penalties; enforcement; use of monies

A. The director may shall assess a civil penalty against a person who violates this chapter or a rule adopted pursuant to this chapter in an amount of not to exceed five hundred dollars at least $5,000 and not more than $10,000 for each violation. Each day that a violation occurs constitutes a separate violation.

B. The director may shall issue a notice of assessment that shall include the proposed amount of the assessment. A person may appeal the assessment by requesting a hearing pursuant to title 41, chapter 6, article 10. When an assessment is appealed, the director shall take no further action to enforce and collect the assessment until after the hearing.

C. In determining the amount of the civil penalty pursuant to subsection A of this section, the department shall consider the following:

1. Repeated violations of statutes or rules.

2. Patterns of noncompliance.

3. Types of violations.

4. The severity of violations.

5. The potential for and occurrences of actual harm.

6. Threats to health and safety.

7. The number of persons affected by the violations.

8. The number of violations.

9. The size of the facility.

10. The length of time that the violations have been occurring.

11. The number of injuries caused.

12. The severity of the injuries caused.

13. The number of deaths caused.

14. The cause of deaths.

D. Pursuant to interagency agreement specified in section 36-409, the director may shall assess a civil penalty, including interest, in accordance with 42 United States Code section 1396r. A person may appeal this assessment by requesting a hearing before the director in accordance with subsection B of this section. Civil penalty amounts may be established by rules adopted by the director that conform to guidelines or regulations adopted by the secretary of the United States department of health and human services pursuant to 42 United States Code section 1396r.

E. Actions to enforce the collection of penalties assessed pursuant to subsections A and D of this section shall be brought by the attorney general or the county attorney in the name of the state in the justice court or the superior court in the county in which the violation occurred.

F. Penalties assessed under subsection D of this section are in addition to and not in limitation of other penalties imposed pursuant to this chapter. All civil penalties and interest assessed pursuant to subsection D of this section shall be deposited, pursuant to sections 35-146 and 35-147, in the nursing care institution resident protection revolving fund established by section 36-431.02. The director shall use these monies for the purposes prescribed by 42 United States Code section 1396r, including payment for the costs of relocation of residents to other facilities, maintenance of operation of a facility pending correction of the deficiencies or closure and reimbursement of residents for personal monies lost.

G. The department shall transmit deposit penalties assessed under subsection A of this section to in the state general fund following funds as follows:

1. Eighty percent in the indigenous peoples protection revolving fund established by section 36-431.03.

2. five percent in the health services licensing fund established by section 36-414. The department shall use the monies deposited in the health services licensing fund pursuant to this paragraph for inspections and enforcement relating to residential care institutions.

3. fifteen percent in the nursing care institution resident protection revolving fund established by section 36-431.02. END_STATUTE

Sec. 10. Section 36-431.02, Arizona Revised Statutes, is amended to read:

START_STATUTE36-431.02. Nursing care institution resident protection revolving fund; use; nonreversion

A. The nursing care institution resident protection revolving fund is established. The fund consists of monies received from civil penalties collected by the director pursuant to section 36-431.01, subsection D.

B. The director shall use monies in the fund for the purposes prescribed in section 36-431.01, subsection F, subject to legislative appropriation.

C. Monies in the fund are exempt from the provisions of section 35-190 relating to the lapsing of appropriations.END_STATUTE

Sec. 11. Title 36, chapter 4, article 2, Arizona Revised Statutes, is amended by adding sections 36-431.03 and 36-431.04, to read:

START_STATUTE36-431.03. Indigenous peoples protection revolving fund

A. The indigenous peoples protection revolving fund is established to support resiliency and healing of indigenous peoples in this state. the fund consists of monies deposited pursuant to section 36-431.01. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to the lapsing of appropriations. The director shall administer the fund.

B. The monies in the fund shall be used annually as follows:

1. Forty percent shall be transferred to tribal colleges in this state for programming in social work and behavioral health.

2. Twenty percent shall provide restitution payments for families of deceased victims of this state's behavioral health system and sober living homes. Each family of a deceased victim shall receive a minimum of $3,000 and the repatriation of the victim's human remains and expenses.

3. Forty percent shall be distributed to tribal communities for behavioral health treatment services and programs or residential homes, including behavioral health residential facilities, sober living homes and transitional homes.END_STATUTE

START_STATUTE36-431.04. Legal action or sale; effect on licensure

A. The department shall not approve an application for licensure of a currently licensed health care institution while any enforcement or court action related to health care institution licensure is pending against that health care institution's current licensee.

B. The director shall continue to pursue any court, administrative or enforcement action against the licensee even though the health care institution is in the process of being sold or transferred to a new owner.

C. The department shall not approve a change in ownership unless the department determines that there has been a transfer of all legal and equitable interests, control and authority in the health care institution so that persons other than the transferring licensee, that licensee's agent or other parties exercising authority or supervision over the health care institution's daily operations or staff are responsible for and have control over the health care institution. END_STATUTE

Sec. 12. Rulemaking exemption; intent

A. Notwithstanding any other law, for the purposes of this act and amending the rules relating to residential care institutions, the department of health services is exempt from the rulemaking requirements of title 41, chapters 6 and 6.1, Arizona Revised Statutes, through June 30, 2025.

B. The legislature intends for the department of health services to review and amend the rules for behavioral health residential facilities to ensure that there are adequate and proper requirements for staffing, care and oversight.